Avolon order 75 Boeing jets, likely to order extra 20

Avolon which is a Chinese aircraft leasing company has decided to order for 75 Boeing (BA.N) airplanes with every likelihood that the company will order for many more. This was revealed by the parent company Bohai Capital on Sunday.

The leasing company which is based in Dublin, Ireland was founded by the Chief Executive Officer Domhnal Slattery. The company has agreed to purchase 55 Boeing 737 MAX 8 aircraft and 20 of the higher-capacity Boeing 737 MAX 10. This information was contained in the company’s filing. The filing stated that the company will likely order for 20 of the main 737 MAX 8 version.

Based on the prices that were released, the deal would cost a reported $8.7 billion at list values. Analysts, however, stated that buyers will get a discount of 50% for planes of such models. Adding the extra 20 planes to be ordered, later on, the deal would be roughly $11 billion at list prices, the company stated.

The deal was a confirmation of the MOU both Avalon and Boeing signed at the Paris Airshow back in June, for the initial 75 Boeing 737 MAX 8 aircraft. During that period, Avolon was considering the Boeing’s 737 MAX 10, even though nothing was concrete yet.

Bohai group which is a part of aviation-to-shipping conglomerate HNA Group stated that Avolon is expected to have those airplanes in their possession between 2021 and 2024. Back in 2015, Avolon was acquired by a Shenzhen-listed company, Bohai Capital Holding Co.

Bohai isn’t the only Chinese backed firm that is currently expanding its aircraft financing and leasing sector, as customer airlines keep adding new routes both in China and abroad. This deal is also a confirmation of the deal made by Airbus and Boeing who had reported the orders of 100 jets. The buyer of those airplanes is the China Development Bank Financial Leasing (CDB Leasing).

During the Dubai Show last week, Airbus made the public aware of an order for 45 jets, lightening up a show that boasted preliminary order of a record 430 jets even though it hasn’t started yet. CDB ordering Airbus planes seem to align with the announcement made by Boeing after it reported that it had gotten an order for 56 jets from the same CDB. According to the filings, both deals were confirmed on 8th of this month.

I am a lecturer at the University of Economics in Bratislava, department of Banking and International Finance. I have a Ph.D. academic degree, my dissertation was focused on major markets. Commodities and stock markets are also the main focus of my research and publication activities.
I have approximately 10 years of investing experiences. My investments mostly focus on small- to mid-cap companies of energy sector, financial and technology.